Cisco to acquire Acacia Communications

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Cisco has announced its intent to acquire Acacia Communications.

The two companies have entered into a definitive agreement under which Cisco has agreed to acquire existing supplier, Acacia, which designs and manufactures high-speed, optical interconnect technologies for webscale companies, service providers, and data centre operators.

Under the terms of the agreement, Cisco will acquire Acacia for $70.00 per share in cash, or approximately $2.6 billion on a fully diluted basis, net of cash and marketable securities.

The move comes as innovation across software, silicon and optics fuels Cisco's initiative to make networks smarter, simpler and more secure. It currently offers a portfolio of optical systems that address performance, power, and cost requirements. The addition of Acacia's technology will enrich this portfolio, allowing the growing number of customers transitioning from chassis-based systems to pluggable technology to simplify operations and reduce network complexities.

Once the transaction has closed, Acacia employees will join Cisco's Optical Systems and Optics business within the networking and security business under David Goeckeler, executive vice president and general manager of Cisco's networking and security business.

Goeckeler, commented: ‘With the explosion of bandwidth in the multi-cloud era, optical interconnect technologies are becoming increasingly strategic. The acquisition of Acacia will allow us to build on the strength of our switching, routing and optical networking portfolio to address our customers' most demanding requirements.’

Raj Shanmugaraj, president and chief executive officer at Acacia added: ‘Coherent technology has been a game-changer for optical networking and continues to evolve with the deployment of pluggable coherent optics. Upon close, Cisco and Acacia will continue to serve and support existing Acacia customers. By integrating Acacia technology into Cisco's networking portfolio, we believe we can accelerate the trend toward coherent technology and pluggable solutions while accommodating a larger footprint of customers worldwide.’

The acquisition is expected to close during the second half of Cisco's FY2020, subject to customary closing conditions and required regulatory approvals.

Cisco also completed the $660 million acquisition of semiconductor company, Luxtera earlier this year.

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